business plan

A good business plan helps you to focus your thoughts and prioritise your actions to get your business up and running and then help it grow over time.  It should capture your aims and how you are going to achieve them, evolving as your business matures and your thoughts develop.   

 

Spending time on this upfront can help avoid incurring significant wasted costs on pursuing business models that are unworkable.  A realistic, coherent business plan will help you demonstrate the viability of your proposals to potential investors, lenders, partners, bank managers, and perhaps even customers. 

 

Consider carrying out a 'SWOT' analysis, identifying the strengths, weaknesses, opportunities and threats for your business.  No business is entirely risk-free.  If you anticipate potential 'gaps' or problems, you should aim to mention them, indicating the practical approach you have in mind to address them. 

Whatever format you use, try to cover each of the following areas, ideally in both a 'plan on a page' overview and in a full business plan as well. 

 

See here for our suggested templates that you could use:    

Full Business Plan

#1.

Elevator Pitch 

Imagine you have less than a minute in a lift between floors with a potential investor or partner.  In one or two sentences, how would you clearly describe your business idea and why it will succeed, making a compelling 'pitch' for him/her to work with you, or at least want to understand your proposal in more detail?  

#2.

Business offering

  • What products or services will you sell, and why will people want to buy them?  Is there a particular problem you are solving, need you are meeting or niche you are filling?  

  • Is your product ready and tested (with customers and if appropriate, tested and approved technically)?  If not, what product development work do you need to do, over what timeframe? 

  • What relevant skills, experience or training do you have that will help you succeed?

  

  • Do you have IP protection for any creations/ technologies/ brand forming all or part of this portfolio of products and services?

 

#3.

VISION & GOALS

  • What is your vision for your business and its ‘value proposition’?  Why will people buy into it?  

 

  • What are your short and long-term business objectives?  How will your portfolio of products or services develop over time to meet those objectives?

  • If your business is already established, can you point to past successes, where previous goals were achieved?

#4.

Customers

  • What is the relevant market?  Is thi s an existing market, or are you seeking to create a new one, or both?

  

  • Which part of the supply chain will you sell to (eg wholesale vs retail; component supply; licence to manufacturers; authorised agents/licensors)?

 

  • If selling to end-user consumers, do you expect they will fall typically into a particular demographic?

  • Do you have an existing relationship with any intended customers, or is this something you will need to develop?

  • How do you know? What searching and market research can you show you have done?

 

#5.

Competitors

  • Who are your likely, or potential, competitors?  

 

  • Is anyone else already doing/ selling what you plan to, or capable of doing so easily?  (For example, bigger market players with better resources, infrastructure or market presence than you.)

 

  • If so, what exactly are they doing or could they do? How well could they do it, and on what scale?  

 

  • How are your products/ services better or different?  

 

  • Do you have exclusive IP rights that may be a barrier to market entry for others, or do others have exclusive rights that may block you?

 

  • Again, how do you know?  What searching and market research can you show you have done?

 

#6. 

implementation

  • Try to develop a detailed action plan setting out how you will get your business into operation, or to continue operations and perhaps expand over time, that covers all practicalities, and will enable you to achieve your business goals?

  • Think through what employees or other staff you need now, or may need in the future, and how you will recruit, manage and pay them and deal with pension, tax, health and safety and all other arrangements.

  • Think about what partners you may need to collaborate with on particular projects, and how you will go about engaging with them.

  • What office space or other premises will you need, and how you will you arrange this and associated utility services?

  • What suppliers and contractors do you need to engage such as security, storage, delivery, cleaning, power, wifi, IT support etc.

  • What product development or certification, and testing with customers do you need to do before (and after) launch?

  • What is your timeframe for each of these issues?  Can you indicate realistic timing for key milestones?

#7.

sales & Marketing

  • How will you sell?  Online (website, online marketplace); Shop; Office; Travel to customer etc. 

 

  • What will your trading structure be? Sole trader, limited liability company, partnership?

  • Do you already have a recognised brand or are you developing one?

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  • Are you using intellectual property rights to protect and exploit your brand (for example registering your business name and/or logo as a trade mark)?

  • How will you generate awareness & interest, and attract customers, staff, partners or investors?

 

  • How will you differentiate yourself from competitors, and encourage people to buy from you instead?

 

  • What ‘offline’ marketing will you do (for example attending conferences, exhibitions, fairs; flyers, local/national press; radio/ TV advertising)?

 

  • What online marketing will you do (for example running a website, whether for sales or just a showcase; social media accounts)? :

 

  • Think about your approach to search engine optimisation to fully leverage your online presence.

#8.

pricing

  • Be clear on what you will charge for each product or service you will offer, mindful of the market, and what competitors may be charging, and what your outgoings will be to pay for materials, delivery etc. to ensure you make a profit.

 

  • Think about how you will ask to be paid: upfront, in arrears, on a monthly basis, or maybe a combination?

#9.

financial projections

​This is a key one for the bank manager, other lenders or potential investors: try to be realistic and don't worry if your projections don't point to a profit until your second year, say.  Investors just want to understand the longer term picture.

  • What are your anticipated outgoings and expenditure for the next year and beyond? (For example: any outlay for office or other specialist equipment, marketing, advertising, staff costs, premises costs (rental, health and safety, security), IT, insurance, utilities, loan repayments etc.)

 

  • How many customers do you expect to attract in the first year, and how many sales do you expect to make?

 

  • What is your realistic profit in the first year (anticipated outgoings and expenditure less anticipated profits), if any?

 

  • If no short-term profit is anticipated, what is the envisaged timeline to the business generating a profit?  Where will growth come from?

#10.

funding

Think about what funding you may need to set up your business (for example initial purchases such as computers and other IT equipment), how much you would need to achieve your plans to expand, and so on.  Do you need external funding now, or perhaps at some milestone in due course? 

 

  • If so, what additional funds will you need, and for what purpose?  Can you point to the specific part of your implementation plan that the money would be used for (for example employees, equipment, premises, services etc.)?

 

  • How will you repay any loans if things do not go well?

#11.

risks & regulation

As we said at the start, no business is risk-free.  Try to identify specific risks for your business plan - ‘crunch’ issues where things may go wrong or where you anticipate delays or potential blockers.  

  • For each of these, what is your practical plan to address the issue and avoid or minimise the impact on your business?

 

  • Do you have a ‘Plan B’ for each of these identified key areas: what alternative action your business will take, and how you will continue to meet any existing loan payment obligations until the issue is resolved/worked around?

Also, think about whether there are any specific legalregulatory or certification requirements for your particular goods or services or industry. 

 

  • If so, have you obtained the necessary advice and made the necessary arrangements to comply and be certified as required?

 

  • Have you made arrangements and developed appropriate policies to comply with regulations covering businesses generally, such as Data Protection, Anti-Bribery & Corruption, Anti-Money Laundering, Competition rules, Health & Safety, etc.?

Finally, make sure you have the necessary insurance, and indicate this in your plan: this kind of thoroughness will be looked on favourably by third parties interested in your business.

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